The prevailing low cost of electricity in Trinidad and Tobago poses a challenge to the transition to renewable energy sources.
So said Prime Minister Dr Keith Rowley as he addressed the 2023 Trinidad and Tobago Energy Conference at the Hyatt Regency yesterday.
Noting that the country is at an early stage in the development of a renewable energy industry, the Prime Minister challenged the Ministry of Energy to move quickly to bring more renewable energy projects on stream.
The Prime Minister said on November 29, 2022, the Government launched the Roadmap for a Green Economy in T&T, developed by the IDB in collaboration with the Ministry of Energy, which determined that of all the potential renewable energy sources in Trinidad and Tobago, offshore wind offered the largest potential for the country with a projected output of approximately 25 gigawatts of levelised energy.
He said the initial goal of the roadmap is the establishment of a wind pilot project and towards this end, the Ministry of Energy in collaboration with National Energy and the European Union would be conducting a National Wind Resource Assessment to identify potential sites for wind farm development in Trinidad and Tobago.
He said the construction of solar parks, the result of an agreement between Government and the consortium of Lightsource bp, BP and Shell for a 112.2 megawatt Solar Utility Project, is scheduled to begin in the first quarter of this year. The full operationalisation of the project is expected by the fourth quarter of 2024 and it would also provide impetus to the development of a renewable energy industry.
He said the solar utility project, which is the largest solar project in the English-speaking Caribbean, will meet eight per cent of the country’s power generation requirements, on completion. He stressed, however, that the Government’s stated objective is to increase power from renewables to meet 30 per cent of the country’s requirements.
The Prime Minister noted, however, that the transition to renewables is not without challenges. He said the prices for wind and solar power increased nearly 30 per cent in the past year due to global supply chain issues, significant price increases for components and increases in labour cost in producing countries, reversing a decade of cost declines.
He added that another hurdle, as encountered by the Solar Parks Project, is the competition with prevailing low cost of electricity in Trinidad and Tobago.
He said a review of the country’s power requirement had projected peak demand to increase from 1400 MW to 1600 MW by 2032. He said during this period the PPA (Power Purchase Agreements) of two of the country’s major independent power producers representing 40 per cent of the country’s installed generation capacity are due to expire.
“We therefore have an opportunity to achieve much of the target of 30 per cent of power from renewables,” he said.
Oil and gas still king
The Prime Minister said while the outlook for the development of renewable energy was promising and attainable, renewables could not in the near- to medium-term replace oil and gas. He said while new breakthroughs in technology were making renewable energy reliable and viable, fossil fuels generally cost less than renewables.
“Therefore the cost competitiveness of renewable energy technologies will be one of the main factors dictating the pace of deployment,” he said. “Notwithstanding the current issues, the outlook for renewables is technically promising but widespread cheap energy from these myriad sources are still some time away,” he said.
The Prime Minister said while the Government’s primary focus is the optimum development of hydrocarbon resources, it could not ignore the initiatives being taken globally to develop low -arbon economies. He said the Government would be introducing Feed in Tariff legislation as part of its strategy to encourage low-carbon power generation technologies and renewable energy generation.
Improved gas production
He said the Government has been pursuing the accelerated exploration and development of the country’s hydrocarbon resources as it transitions to a lower carbon economy.
The Prime Minister said natural gas production is expected to improve in 2023 based on projects which came on stream in mid-to-late 2022. “In the period 2024-2026 projects with a production capacity of 1.5 bcf per day will serve to stabilise projects such as Shell’s Manatee Project and Woodside’s Calypso project.
However, there is much work to be done to bring these projects to a final investment decision,” he said.
Noting that crude oil is an important revenue earner, the Prime Minister said the outlook in the near term was positive given the aggressive drilling programme of EOG and Trinity, recent discoveries by Touchstone and the generous fiscal incentives made available to onshore producers and shallow water marine areas in recent times.
